Will algorithms replace lawyers? No, but they will revolutionise the legal sector

Not just the manufacturing industry: artificial intelligence is now entering the world of liberal professions. We already have software packages that can perform better legal assessments than humans: “But they lack the sensitivity of a lawyer”

The impact and level of development of artificial intelligence is often measured with man vs machine challenges. It has happened with chess, with Go (a Japanese game of draughts), with video games, and now with lawsuits. Last October, in London, a pool of 100 lawyers took on the challenge of producing more than 750 legal assessments on the likely outcome of an insurance dispute over a period of seven consecutive days. To little avail, however, as in the end the challenge was one by CaseCruncher, a software package developed by a group of Cambridge students. On what grounds? Level of precision, analysis of non-legal factors, and submission of a wide range of variables. “These results do not mean that machines are better at predicting outcomes than human lawyers. These results show that if the question is defined precisely, machines are able to compete with and sometimes outperform human lawyers”, said Ludwig Bull, Scientific Director of CaseCrunch (the start-up behind the software). But the ears of millions of lawyers throughout the world have started to ring.

After all, just looking at the level of investments in the regtech industry (which uses IT to enhance regulatory processes) is enough to tell us that something is changing. According to a CB Insights survey, venture capitalist investments have reached five billion dollars, spread across 585 rounds of funding within the last five years. This positive performance has spilled over into legal technology (i.e. technology specifically designed for legal firms): over 300 million dollars were collected in 2017. The greatest success story is without doubt California-based Druva, with its 198 million dollars of funding, which aims to revolutionise the legal sectormy means of software designed to protect companies’ sensitive data. Half that amount, or 96 million dollars to be precise, have been allocated to Zapproved: an IT company in Portland that offers cloud-based services to the legal departments of corporate groups. And as these systems spread, major legal and consultancy firms are not just standing by.

From several months now, JpMorgan has been using the Contract Intelligence (Coin) platform that, in just a few seconds, can perform tasks that previously required up to 360,000 hours of work.Ross is another system that has been operational oversees for over a year now (and in six Milanese firms since 2017): its cost per month is equivalent to the cost of one man-hour, and it makes no demands in terms of working hours or holiday leave. Developed by IBM, Ross is an artificially intelligent system that has access to a vast legal database and effortlessly reads through and finds numerous answers for any legal question.

If the question is defined precisely, machines are able to compete with and sometimes outperform human lawyers

Ludwig Bull, Scientific Director at CaseCrunch

And in Italy? Although there are still relatively few legal tech start-ups (roughly 0.1%), this is undoubtedly an up-and-coming field. The President of Milan’s Association of Lawyers, Remo Danovi, on the occasion of the European Day of Civil Justice held on November 6th, expressed his opinion on these developments: “Every industrial revolution, every profound economic and social transformation, has always brought huge potential in terms of the development of intellectual professions and the vast universe of economic and production consultancy. Consequently, as an exponent and representative of one of the largest professions, I should be very pleased about these prospects for the development of the legal profession. But this time, things are different.” His is a direct reference to the various international surveys that, based on uncertain data, predict unprecedented job losses due to the development of AI. Also among lawyers. “Everything is changing, but the question is, can logical and procedural reasoning; can the study of a case, of the rules, of precedents; can the parties’ expounding of the case, the judge’s decision, the grounds of the judgement, be entrusted to artificial intelligence?” continued Mr Danovi. “What we can and must determine is up to what point we should avail of these machines, and the cut-off point after which the intellect cannot be replaced by algorithm-based, artificial intelligence.”

Francesco Portolano, of the Milanese Portolano-Cavallo firm, provides an answer: “At the start of the 1900s, legal firms made use of law writers who made hand written fair copies of legal documents. Then, with the advent of typewriters, their job changed, allowing law firms to take on more work with the same staff.” From the typewriter to the computer, the Milanese firm was among the first in Italy to introduce the Luminance software, a platform that analyses documents and classifies clauses in record time. “After a pilot phase,” says Mr Portolano, “in September we introduced the system permanently, with the principal result of reducing the number of hours required to obtain the same result. Thus, we have revised our work and training rationale. Trainees, for example, can now dedicate their time to more sophisticated tasks, making an otherwise boring job more interesting”.

How high is the risk of doing away with lawyers altogether? "Low, I would say,” says Mr Portolano. “One indispensable factor in any human interaction is sensitivity, that exclusively human trait that enables you to choose what to say and do based on the context and on the person in front of you.”